Apartment Bubble Inflating Fast
By Diana Olick, CNBC Real Estate Reporter
NEW YORK (CNBC) -- Housing construction numbers for September were "blowout" and "smashed consensus," according to analysts who follow the sector. Single family starts rose 11% from August and are up nearly 43% from a year ago. This from the depths of the housing recession.
Multi-family starts and permits, however, garnered a different headline: "Headline Risk as Data Cross 10-year Averages," came the report from Cantor Fitzgerald.
Building permits for multi-family buildings, which means five units or more, and which will be rental buildings, not condos, jumped 93.4% from a year ago to 323,000, which is above the 10-year average of 296,000."While the silver lining is good news for the broader 'housing recovery,' the elevated permitting activity in the 5+ unit segment may set off alarms in apartment-land," write David Toti and Gaurav Mehta in the Cantor report. "We expect the multifamily REITs could be under pressure today."
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